Pensioners risk missing out on up to £33million each year because they fail to get the very best deal.

When turning an average pension fund of £39,748 into a lifetime income (an annuity), the difference can vary by an average £457, adding up to £11,000 over a 25-year retirement, according to research from Key Retirement Solutions.

The amount a typical, healthy 65-year-old could get from £39,748 ranges from £1,846 to £2,249 a year and someone with, say, lung cancer could get from £2,680 to £3,926 with a specialist product.

While it’s good news that more people are getting smarter and comparing the market for quotes, rather than simply accepting the offer they get from the firm they’ve saved up with, many still miss out.

Though they get better than the original offer, they don’t get the best rate.

This is because they use annuity services that doesn’t cover the whole of the market, including “enhanced” rates which offer larger sums to smokers or those with health issues such as high blood pressure.

Dean Murfin, group director at Key Retirement Solutions, said: “It is vital that pensioners secure the best rate on their funds.

"Better, rather than best, is not good enough when people are making decisions they have to live with for the rest of their life.”